Xcite Energy said it was continuing to make progress with its Bentley field, albeit that it was taking longer than it would like due to the technical nature of the development.
The UK independent said it was maintaining a “flexible and innovative” approach as it pursues potential funding solutions to find the cash for Bentley’s first phase development.
Announcing its second quarter results, the company reported a net loss of $0.4million and retains a cash balance of $34.4million.
Xcite said technical due was diligence continuing with a number of potential field development partners.
The company accepted that it appears to be a slow process, but stressed the Bentley reservoir required extensive and subsurface modelling and detailed analysis in order to fully understand production recovery from the field.
The unique characteristics of the field meant there was little to benchmark it and analysis was a highly technical process.
In a statement to investors, it said: “Management believes it is making progress despite the industry environment remaining challenging with the oil price recently falling below $50 per barrel, development budgets remaining under pressure, projects deferred and an increasing number of North Sea assets being put up for sale as oil companies seek to realign their portfolios.”
Xcite believs it can produce oil from Bentley at $35, a relatively low cost-per-barrel for a UK North Sea development.
A recent Baker Hughes technical evaluation of the reservoir has reiterated Xcite’s analysis on the potential recoverable reserves, it said.
Xcite has begun detailed discussions with the Oil and Gas Authority to review the technical approach to the Bentley field development in order to ensure it will be compliant with government policy.